The lottery scam dilemma

WESTERN BUREAU:

Although the authorities have been making inroads in breaking the dominance of lottery scamming in western Jamaica, the illicit trade still has its tentacles firmly hooked in various sectors since it first emerged almost 20 years ago.

Among the ongoing challenges law enforcement face is the lack of compliance under Jamaica’s Proceeds of Crime Act (POCA) by several business operators who continue to profit from earnings from the multimillion-dollar underground industry by conducting cash transactions in excess of the $1 million ceiling.

In spite of the fact that lottery scamming is tied to western Jamaica’s high murder rate and the proliferation of illegal firearms, it is no secret that many businesses in the region – construction companies, hardware stores, car dealership, entertainment events and other ventures – are among the primary beneficiaries of the financial spin-off of the deadly get-rich-quick scheme.

“On principle, I don’t support scamming, but as a businessman, I sell building blocks, sand, steel, and just about everything that is used in the construction sector. And if a man comes in here to spend his money, I am not going to question him as to the source of his funds. That is just the nature of the business,” a Montego Bay hardware store owner, who asked not to be identified, told The Sunday Gleaner last week.

“When he goes to get his X-rays, blood test and MRI done, I am sure they are not going to ask him where he gets his money from, and those are very expensive procedures.”

Another Montego Bay entrepreneur, who operates an electronic business, told The Sunday Gleaner that he “enjoys working for scammers”, because, unlike other customers, they rarely complain about what they are being charged, and they are constantly installing new sound systems and other gadgets in their high-end vehicles.

“A man will come here this week and we install a brand new sound system in his car, and he goes out and see his friend with another system that he likes, and he will come right back to remove the previous one and install the new one,” said the technician.

“Sometimes they even give us the one they take out free of charge.”

MONEY LAUNDERING AND TAX EVASION

Conducting a cash transaction that exceeds $1 million is an offence under POCA for which both the seller and the purchaser can face criminal charges.

Section 101A (a) of POCA stipulates that “a person shall not pay or receive cash in excess of the prescribed amount [$1 million] in a transaction for the purchase of any goods or services or for the payment or reduction of any indebtedness, accounts payable or other financial obligation”.

In Section 101A (b), POCA also makes it clear that individuals cannot “artificially separate a single activity or course of activities into a set of transactions so that each transaction involves a payment and receipt of cash that is less than the prescribed amount but which activity or course of activities in the aggregate involves payment and receipt of cash that exceeds the prescribed amount”.

Deposit-taking institutions such as banks are exempted under the legislation.

Law enforcement officials say some business operators are a big part of the problem in the fight against lottery scamming because they are aware of the law, yet they knowingly breach it.

The Financial Investigations Division (FID), which is mandated to enforce the provisions of the POCA legislation, has “seen indication” of the breaches by business operators, Principal Director Keith Darien told The Sunday Gleaner on Friday.

He said investigations by the police have led to several persons being arrested and charged.

“We had a public education campaign and public advertisements not too long ago with notices all over, including on JUTC buses,” he said, referring to ongoing awareness campaigns stressing that conducting cash transactions above $1 million is illegal.

“So no one can say that they are ignorant of the law,” Darien said, adding that the Bank of Jamaica has also conducted public education campaigns.

He noted that engaging in cash transactions in excess of $1 million fosters money laundering and tax evasion because “cash is anonymous”.

“There is absolutely no paper trail when these people go in and buy these motor vehicles. And it’s not just the use of cash, invariably they are going to register these vehicles in other people’s name so you can’t connect it to the scammer, the drug dealer or any other law-breaker,” the FID head explained.

“When money doesn’t hit a bank account and tax auditors go in, they can’t determine, with any accuracy, the extent of the income and profits generated by a business.”

Darien noted, however, that policing breaches of POCA is not the sole responsibility of the FID.

“That part of the legislation allows any constable, once they have the evidence, to carry out the investigation and lay charges. They are out there in the communities and they are properly trained by us,” he said.

“So we expect that the other officers who are authorised under POCA will exercise their authority and powers in carrying out those probes.”

SENTIMENTS COMMON IN WESTERN JAMAICA

Lottery scamming took centre stage once again recently following utterances from Dennis Meadows, former People’s National Party (PNP) candidate for Trelawny North.

In a widely circulated video of a speech on a campaign stage, in the lead-up to the recent local government elections, Meadows told cheering party supporters that he had no problem with ‘choppas’, the street name for lottery scammers.

“I have no problem with a man if him waa chop, because they chop us during slavery, so nothing wrong if we chop them back!” said Meadows.

Although he issued a statement withdrawing the remarks, the PNP removed him as its representative in the constituency.

Unfortunately, stakeholders say, Meadows’ sentiments are common in western Jamaica, where law enforcement officials constantly struggle in community meetings to get residents to reject lottery scamming as a source of income, stressing its dire impact on the lives of many.

Several citizens will readily admit that they are opposed to the spin-off violence, murders and the proliferation of illegal guns in their communities. However, they are of the view that the scenario reeks of hypocrisy, because while the average person is chastised and prosecuted for endorsing or benefiting from lottery scam, several “respected” business operators are thriving from the ill-gotten gains.

Last year, Senior Superintendent Vernon Ellis, the commanding officer for St James, said the police would be targeting the relatives of scammers who have been providing cover for them by registering properties for them in their (the relatives) name.

“Proceeds from the lottery scam are directly contributing to the acquisition of firearms on the streets. These arms are fuelling the crime surge in the region. Many of the mothers of the perpetrators are involved in registering properties like cars and houses under their names, fully aware that these are proceeds from criminal activities,” Ellis told The Sunday Gleaner at the time.

But what action is being taken against the sellers/suppliers, residents in western Jamaica queried, who should be held equally culpable?

Darien explained that under POCA, law enforcement has the authority to hold the offending business operators to account.

GROWTH OF THE ‘GAME’

When the lottery scam, formerly called the ‘game’, surfaced in St James in 2005, piloted by persons who had working experience in the business process outsourcing (BPO) sector, where they were exposed to the personal information of overseas clients, several impoverished communities suddenly became awash with cash, sparking the acquisition of many new luxury vehicles, a boom in the construction of lavish structures, and ‘flossing’ on the social circuit.

Several videos were circulated of scammers using champagne to wash their high-end vehicles and burning US dollars to light their ‘spliff’ (ganja cigarette).

The scammers were bilking millions of dollars from mostly elderly Americans by convincing them that they had won a lottery but had to pay a processing fee to have the prize money released. They usually target one person for multiple payments and after bleeding them dry, move on to the next victim.

The booming wealth beckoned people from all walks of society to join the game – educated and uneducated, young and old. Its balloon effect soon attracted gangsters, who demanded a share of the spoils through extortion. Many of those who refused to ‘pay’ were murdered gangland-style. The gangsters soon got in on the game, which further fuelled the crime rate, as players who stepped out of line were “dealt with”.

It was during that period that St James’ annual murder count began hitting the 100 mark constantly, reaching a high of 245 in 2017.

The security forces were not insulated from its allure, as several police personnel have been implicated or arrested for their involvement in lottery scamming. In 2016, the Jamaica Constabulary Force (JCF) suffered a significant black eye when 18 police personnel attached to the Mt Salem Police Station in St James were ordered interdicted by Rear Admiral Hardley Lewin, the then commissioner of police, who accused them of being involved in the lottery scam.

SSP Ellis was transferred to St James with a mandate to blunt scamming, using the newly enacted ‘lottery scam law’ – the Law Reform (Fraudulent Transaction) (Special Provision) Act – his intelligence background and knowledge of the terrain, being a native of western Jamaica.

Several initiatives were also put in place to deal with its devastating impact, including the formation of a special anti-gang and anti-lottery scam task force consisting of local and international law enforcement personnel.

LOTTERY SCAM NOT AS BAD AS BEFORE

Although lottery scamming and its devastating impact remain an ongoing challenge for the security forces, the initiatives implemented over the years have yielded positive results, putting a dent in the illicit trade. Hundreds of players have been removed from the game, many arrested, charged, and deported to the United States, where most of their victims are from.

Sharing with The Sunday Gleaner that lottery scamming is currently not at the level it was in former years, Assistant Commissioner of Police Clifford Chambers, the police commander for Area One, noted that it still remains a major area of focus for crime-fighters.

Chambers believes that the significant international spotlight that law enforcement placed on lottery scamming has robbed scammers of the comfort level they once enjoyed.

“I can say that lottery scamming, as a crime, has for the most part been reduced, compared to former years. So, there has been a major reduction in the commission of that offence, partly because of operational and investigative pressure due to the many formations that have it as a focus. Every police in the main across Jamaica has it as a focus,” he said.

“We have the lottery scam task force, MOCA (Major Organised Crime and Anti-Corruption Agency) has it as a major focus, and we have a multiplicity of law enforcement agencies that are targeting scammers and their crimes. Then we also have the legislation that adds value to it, in that it is supported by our external partners, where offenders can be extradited for those offences.”

Nonetheless, he said, lottery scamming remains a top priority for the security forces, especially because it is a springboard to other crimes, which are also significant elements in the overall crime situation plaguing the country.

“Lottery scamming is that crime that cuts across gangs, because gangs are involved. It cuts across money laundering, because it is part and parcel of the same persons (gangs). It cuts across gun smuggling, because it is part and parcel of that construct of crime, so we continue to pay major attention to all the major crimes,” he said.

“Once the crime is on the books, and is being committed, it is a major concern, and this goes for any major crime – robbery, shooting, rape, break-in. We police and mitigate against them.”

Last year, National Security Minister Dr Horace Chang told Parliament that although the illicit scheme remains a major challenge for the security forces, the laws and initiatives in place, including increased support from international partners, have made a big difference in loosening the grip of lottery scamming that reportedly generates some US$1 billion annually.

- Livern Barrett also contributed to this story.

editorial@gleanerjm.com